Coach Acquires Kate Spade For US$18.50 Per Share In Cash

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Coach, Inc. has released an official statement that the company will be acquiring Kate Spade & Company. A conclusive agreement has been signed where Kate Spade shareholders are to receive US$18.50 per share in cash. The total transaction is estimated to reach a value of approximately US$2.4 billion, issued at a 27.5 percent premium to the closing price of Kate Spade’s shares as of December 27, 2016. A unanimous approval was passed by the Boards of Directors of Kate Spade and Coach as per the transaction.

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In October 2016, Coach and Burberry shares were sent soaring in light of media speculation that the two companies were considering a merger. The British trenchcoat maker was also rumoured to be under plans for a takeover bid, as a mystery investor was then starting to build up a stake that was reaching 5 percent.

Victor Luis, CEO of Coach, Inc. believes that the unique brand positioning of Kate Spade would be useful, especially with its “broad lifestyle assortment and strong awareness among consumers, especially millennials.”

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“We believe Coach’s extensive experience… and brand building in international markets, can unlock Kate Spade’s largely untapped global growth potential,” said Luis in a press statement. “The acquisition of Kate Spade is an important step in Coach’s evolution as a customer-focused, multi-brand organization.”

Likewise, Craig A. Leavitt, CEO of Kate Spade & Company said in a statement to the press, “Following a thorough review of strategic alternatives, reaching an agreement to join Coach’s portfolio of global brands will maximize value for our shareholders and positions Kate Spade for long-term success.”

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